This
case concerns the existence of insurance coverage for a June
1, 2016 oil spill in Iberville Parish
“experienced” by Plaintiff Apollo Energy, LLC.
(Doc. 1-2 at 1-2). At the time of the spill, Plaintiff held a
commercial general liability insurance policy (the
“Policy”) through Defendant “Certain
Underwriters at Lloyd's, London.” (Id. at
1). According to the Petition for Declaration of Coverage,
Bad Faith and Damages that initiated this suit (the
“Petition”), the Policy contained a total
pollution exclusion that was “modified and deemed
inapplicable” if each of four “conditions”
of a pollution buyback endorsement were met. (Id.).
These “conditions” included that: (1) the
pollution “occurrence” for which coverage was
sought was accidental and not expected or intended by the
insured; (2) the occurrence commenced “at a specific
time and date” during the term of the Policy; (3) the
occurrence became known to the insured within 30 days of its
commencement and was reported to Defendant “within 90
days thereafter”; and (4) the occurrence did not result
from the insured's intentional or willful violation of
law. (Id. at 1-2).

Plaintiff
reported the oil spill to Defendant on November 1, 2016.
(Id. at 2). In subsequent communications between
Plaintiff and Defendant, Plaintiff “conceded it had not
met the 90 day reporting period” but argued that
Defendant had not been prejudiced by the delay. (Id.
at 2-3). Defendant ultimately denied Plaintiff's claim
concerning the spill based on Plaintiff's failure to
timely report. (Id. at 3). In this suit, Plaintiff
contends that coverage existed for the oil spill and that
Defendant is liable for damages associated with its denial of
the claim. (Id. at 3-4).

Defendant
now moves to dismiss this action under Federal Rule of Civil
Procedure 12(b)(6), arguing that compliance with the
requirements of a pollution buyback endorsement is a
condition precedent to coverage and a showing of prejudice is
not required. (“Motion, ” Doc. 7-1 at 6-8).
Plaintiff opposes, arguing that a showing of prejudice is
required, (Doc. 12 at 3), and that whether the total
pollution exclusion applies at all turns on the answers to
several question of fact, including whether Plaintiff is a
“polluter, ” whether the injury-causing substance
is a “pollutant, ” and whether there was a
“discharge, dispersal, seepage, migration, release or
escape” of a pollutant, (id. at 3-6).
Plaintiff also argues that, at the very least, leave to amend
should be granted. (Id. at 1, 3).

In
reply, Defendant argues that the interpretation and
application of a pollution buyback endorsement is a
“legal, not factual” issue, and that, under Fifth
Circuit law, no showing of prejudice is required. (Doc. 15 at
1). Defendant also contends that leave to amend should be
denied, as there is “nothing by amendment that could
make Plaintiff's claim anything other than a pollution
claim.” (Id. at 2). In a footnote, Defendant
argues that the Petition specifically pleads that the buyback
endorsement applies, which could only be true if “a
pollution claim is at issue.” (Id. at 1 n.1).

II.
LEGAL STANDARDS

a.
Rule 12(b)(6)

In
Johnson v. City of Shelby, Miss., ___ U.S. ___, 135
S.Ct. 346 (2014), the Supreme Court explained that
“[f]ederal pleading rules call for a ‘short and
plain statement of the claim showing that the pleader is
entitled to relief,' Fed.R.Civ.P. 8(a)(2); they do not
countenance dismissal of a complaint for imperfect statement
of the legal theory supporting the claim asserted.” 135
S.Ct. at 346-47 (citation omitted).

Interpreting
Rule 8(a), the Fifth Circuit has explained:

The complaint (1) on its face (2) must contain enough factual
matter (taken as true) (3) to raise a reasonable hope or
expectation (4) that discovery will reveal relevant evidence
of each element of a claim. “Asking for [such]
plausible grounds to infer [the element of a claim] does
not impose a probability requirement at the pleading
stage; it simply calls for enough facts to raise a reasonable
expectation that discovery will reveal [that the elements of
the claim existed].”

Applying
the above case law, the Western District of Louisiana has
stated:

Therefore, while the court is not to give the
&ldquo;assumption of truth&rdquo; to conclusions, factual
allegations remain so entitled. Once those factual
allegations are identified, drawing on the court&#39;s
judicial experience and common sense, the analysis is whether
those facts, which need not be detailed or specific, allow
&ldquo;the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.&rdquo;
[Ashcroft v. Iqbal,556 U.S. 662, 678 (2009)];
Twombly, [550] U.S. at 556, 127 S.Ct. at 1965. This
analysis is not substantively different from that set forth
in Lormand, supra, nor does this jurisprudence
foreclose the option that discovery must be undertaken in
order to raise relevant information to support an element of
the claim. The standard, under the specific language of
Fed.R.Civ.P. 8(a)(2), remains that the defendant be given
adequate notice of the claim and the grounds upon which it is
based. The standard is met by the “reasonable
inference” the court must make that, with or without
discovery, the facts set forth a plausible ...

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